Title: Frequency of Audit on ERCOT Model
Next Group:
Next Step:
Status: Approved on 07/16/2013
Effective Dates:


Date Gov Body Action Taken Next Steps
07/16/2013 BOARD Approved
05/02/2013 TAC Recommended for Approval ERCOT Board Consideration
04/18/2013 PRS Recommended for Approval TAC Consideration
03/21/2013 PRS Recommended for Approval PRS IA Review

Voting Record

Date Gov Body Motion Result
07/16/2013 BOARD To approve NPRR526 as recommended by TAC in the 5/2/13 TAC Report Passed
05/02/2013 TAC To recommend approval of NPRR526 as recommended by PRS in the 4/18/13 PRS Report Passed
04/18/2013 PRS To endorse and forward the 3/21/13 PRS Report and Impact Analysis for NPRR526 to TAC Passed
03/21/2013 PRS To recommend approval of NPRR526 as submitted Passed

Vote tallies here reflect individual votes, not the weight of the votes by market segment. Affirmative votes are not recorded in these vote tallies. For additional details on the voting record, please consult the Recommendation or Action Report, or the official vote tally if available, as posted in the key documents.


Status: Approved
Date Posted: Mar 6, 2013
Sponsor: ERCOT
Urgent: No
Sections: 3.10
Description: This Nodal Protocol Revision Request (NPRR) revises the frequency of the audit on the ERCOT model from an annual audit to once every three years.
Reason: A 3-year audit schedule for model consistency is frequent enough to verify compliance with Section 3.10. The following points should be considered: 1) The 2012 audit required by paragraph (5) of Section 3.10 and performed by the Internal Audit Department demonstrated ERCOT has achieved a high level of consistency in its models subsequent to the planning model process change. There were no significant management action plan items required as a result of the audit. 2) The process for collecting model data and producing models is now mature and no longer changing at the rate it was when Section 3.10 first went into effect. The risk of reverting back to producing inconsistent models is low. 3) ERCOT would like to focus its limited internal audit and other resources in a risk-based manner. Internal Audit, Executive Management, and Enterprise Risk Management have an annual Internal Audit Planning Process that aims to focus internal audit resources on areas of greatest risk for the organization. As the last audit of this area indicated a reduction in risk to the organization, it is appropriate, through a change in the Protocol audit frequency requirement, to allow flexibility to Internal Audit and Management for the scheduling of less frequent audits for this area to align with this risk-based auditing approach. 4) Each of the last two annual audits (2011, 2012) required over 190 hours of work (this figure does not include Internal Audit’s time) at an estimated cost of $10K per audit). 5) Prior to the annual "independent" audit requirement, the Modeling Team performed self-audits efficiently and effectively. Self-audits could be conducted and reported through management during the two years in between the independent audits performed by the Internal Audit Department if the independent audit requirement in Section 3.10 is adjusted to every three years instead of annually. 6) If inconsistency problems begin to arise, a more frequent independent audit schedule can be implemented at any time.

Key Documents

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